3 minutes
In most cases, implementing same-day ACH will mean tweaking familiar processes.
The rails built for economical heavy payment traffic weren’t built for speed, but that’s changing with the introduction of same-day ACH. NACHA The Electronic Payments Association will move ACH to same-day credits and debits pretty quickly, predicts Peter Olynick, senior practice lead for retail banking at NTT DATA Consulting Inc., Plano, Texas.
“You’ll see multiple batch windows, maybe one every four to six hours. And that will become one viable fast payment option, but we won’t see just one winner. There will be multiple options with multiple speeds for multiple situations.”
This faster payment option is being phased in, notes Deborah Phillips, managing director for payments strategy at CUES Supplier member Jack Henry & Associates, Monett, Mo., with intraday transmissions already occurring in Step 1 of a three-step process. CUs and banks now must receive same-day ACH credit files at intervals throughout the day (“intraday” presentments).
“So far, the impact has been modest,” she says. “We’re primarily seeing expedited payroll files at this point. NACHA reports higher than predicted volumes, which could be an indicator of market appetite for faster payments.”
Coming in Step 2 in September 2017 are ACH debit file transmissions, which will interest payees anxious to get their money quicker, primarily business members for CUs. For Step 3, mandated for March 2018, receiving CUs will be required to make funds available by 5 p.m. local time, Phillips explains.
In most cases, same-day ACH will mean tweaking familiar processes like processing batch files. The stakes are higher, Phillips notes, for CUs asked to originate ACH debits for business members because that may entail additional risk mitigation. But credit unions aren’t required to roll out same-day ACH origination services across the board, she points out; they can do it selectively for members who are the most creditworthy or for those that have the strongest business need and see value in this type of a premium service.
So far, same-day ACH has been “almost uneventful” at the Richmond-based $3.3 billion Virginia Credit Union, reports CUES member Linda Locey, AVP/transaction operations. “A few additional same-day ACH files come in throughout the day, but it hasn’t had much effect yet on our costs or staffing. We post warehouse credits first thing in the morning and then process same-day files, as they become available.”
The intraday ACH files that arrive so far are credits, a popular option for payroll files, she notes. In an ACH credit file, the money comes in with a list of accounts to which payments are to be credited.
When businesses start receiving funds from intraday debit files, the interest might be greater because businesses are more float conscious than most consumers, she explains. An ACH debit file lists accounts from which money is to be drawn.
Virginia CU has yet to originate intraday ACH files, which will involve more steps and more risk, Locey says. It’s too early to say whether the CU will charge a fee, she adds. “It depends on volume. The benefits to us might outweigh the nominal costs. We’re still in the exploration phase.”
Richard H. Gamble is a freelance writer based in Colorado.
